Richard Wilson is founder of Wilson Holding Company and the CEO of The Miami Family Office, a single family office with $500M in assets, he runs the largest family office association globally, and is a bestselling author of The Single Family Office Book.

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Harbinger Capital

Harbinger Capital | 13F Hedge Fund Holdings

This post is being written as part of HedgeFundBlogger.com's Investment Securities Tool which analyzes the holdings of hedge fund managers.

Harbinger Capital is a $13.8 Billion firm ran by Philip Falcone. Taken from StreetInsider, Harbinger is "a disciplined, value investor with an emphasis on intensive credit research. Its focus is on middle market companies that tend to be misunderstood or under-researched by the market. Investment approaches include:

Restructuring/Bankruptcy, Turnaround, Liquidation, Event Driven, Capital Structure Arbitrage, Short Sale and Special Situations." At one point during this year, they were up as much as 42% (more on that below).

So, now that we've got a background on Harbinger Capital, let's take a quick look at their portfolio highlights. Keep in mind that this is merely a brief summary of their top holdings. Due to the time sensitive nature of the 13F material, I wanted to get this information posted before the next set of filings come out in November.

Harbinger's top 3 holdings have undoubtedly increased the volatility in their portfolio. Those three stocks have been on a downward spiral to hell. Freeport McMoran (FCX), Harbinger's top holding, traded around $110-120 at the time of this SEC filing. Since then, FCX has sold off hard and currently trades around $53. Additionally, their position in Cleveland Cliffs (CLF), which they increased by 127% last quarter, has played out in similar fashion. (They basically bought additional CLF at the top). CLF traded around $120 at the time they disclosed their positions. Now, CLF trades around $48. How about some more? Let's move on to AK Steel (AKS), which traded around $70 at the time of this filing. Now, it trades around $23. Undoubtedly, you get the picture. Harbinger's metals and natural resource plays have really been a thorn in their side. And, if there is one 13F filing I am most looking forward to come November, Harbinger's would be it. Because, in that next filing, we will get to see their updated portfolio to see if they were "buying the dip" in these names, or whether they were puking them up with the rest of the market. Harbinger has massive positions in these names, as they are their top 3 largest portfolio holdings.

So, how much pain did those positions (among others) cause Harbinger? Well, a lot, as I recently noted in my performance update on Harbinger. Earlier in the year, they were up as much as 42%. And, nowadays, they find themselves up only 2% for the year. How's that for a swing? This is why I say that their next filing will be very interesting, because many of their top holdings have seen wild volatility.

Other notable portfolio news includes new positions in Sprint Nextel (S), Cablevision (CVC), Peabody Energy (BTU), and Yahoo (YHOO). These are positions that Harbinger did not hold in the prior quarter and thus are new holdings. And, they were sinking a lot of money into these positions, as they brought all of these holdings all the way up to top 20 holdings in their portfolio.

One last thing I want to mention is their position in Corn Products International (CPO). Over the past quarter, they boosted their position in this company by 168%, bringing it up to their 13th largest holding. So, on one hand, you can highlight that they were buying with conviction and that maybe it's a name we should be paying attention to. On the other hand, they added to CLF with conviction and look where that got them. Point being, they were heavily adding to this name.

Also, since this 13F filing, we have seen additional activity by Harbinger. In a recent 13G filed with the SEC, Harbinger has disclosed a 6% ownership stake in Ashland (ASH). They now own 3,789,266 shares. Curiously enough, in the 13F detailed above, Harbinger held 5,871,426 shares of ASH. So, they've decreased their position substantially recently. A 13G filing signifies a passive investment in a company. But, as we are all too familiar with Harbinger's activist exploits in the coal/steel arena, there's always the option they could shift this position from a passive investment, to an activist one (which would require a 13D filing). But, for now, they've maintained it as a passive investment while decreasing their stake.

That sums up the details of Harbinger's filing. Overall, it's been the worst year for hedge funds in a long time, and Harbinger is a perfect example of such volatility.

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